Millions More Americans Seek Jobless Benefits; Productivity Dives

Millions more Americans sought unemployment benefits last week, suggesting layoffs broadened from consumer-facing industries to other segments of the economy and could remain elevated even as many parts of the country start to reopen.

The deepening economic crisis triggered by nationwide lockdowns to slow the spread of the novel coronavirus was underscored by other data on Thursday showing worker productivity dropped at its fastest pace in more than four years in the first quarter amid the largest drop in hours since 2009.

The reports support many economists’ belief that the economic slump could persist for a while. The economy shrank in the first quarter at the steepest pace since the Great Recession of 2007-2009. Data on Wednesday showed private payrolls fell by a record 20.2 million in April, which set up the overall labor market for historic job losses.

Initial jobless claims for state unemployment benefits totaled a seasonally adjusted 3.169 million for the week ended May 2. Data for the prior week was revised to show 7,000 more applications received than previously reported, taking the tally for that period to 3.846 million. Economists polled by Reuters had forecast 3.0 million claims for the latest week.

It was the fifth straight weekly decrease in applications since the record 6.867 million in the week ended March 28. Still, the latest numbers lifted to about 33.5 million the number of people who have filed claims for unemployment benefits since March 21, roughly 22.1% of the working-age population.

“The pace of new claims for unemployment is slowing, but remains at levels unimaginable just a few months ago,” said Joel Naroff, chief economist at Naroff Economics in Holland, Pennsylvania. “Even with the economy slowly starting to reopen, the number of unemployed should continue to rise sharply as governments, as well as businesses that have tried but not succeeded at holding the line, are now laying off workers.”

In another report on Thursday, the Labor Department said nonfarm productivity, which measures hourly output per worker, decreased at a 2.5% annualized rate in the first quarter. That was the largest decline since the fourth quarter of 2015 and followed a 1.2% pace of increase in the fourth quarter.

Hours worked tumbled at a 3.8% rate last quarter, the sharpest decline since the third quarter of 2009. Hours worked increased at a 1.2% rate in the fourth quarter.

U.S. stock indexes opened higher as investors focused on a surprise rise in Chinese exports and a surge in oil prices. The dollar <.DXY> was little changed against a basket of currencies. U.S. Treasury prices were trading higher.

EMPLOYMENT REPORT AWAITED

Thursday’s weekly claims data will have no impact on the Labor Department’s comprehensive employment report for April, which is scheduled to be released on Friday, as it falls outside the period during which the government surveyed establishments and households for its monthly report.

According to a Reuters survey of economists, nonfarm payrolls are forecast to have plunged by a historic 22 million in April, which would blow away the record dive of 800,000 seen during the 2007-2009 recession. Employment dropped by 701,000 jobs in March, ending a record streak of gains dating to September 2010.

The unemployment rate is seen jumping to 16% in April, which would shatter the post-World War Two record of 10.8% touched in November 1982. The jobless rate in March shot up 0.9 percentage point to 4.4%, the largest monthly change since January 1975.

April could, however, mark the trough in job losses as more small businesses access their portion of an almost $3 trillion fiscal package, which made provisions for them to get loans that could be partially forgiven if they were used for employee salaries. At least 30 states are partially reopening, which could see some of the unemployed going back to work.

The claims report also showed the number of people receiving benefits after an initial week of aid surged 4.636 million to a record 22.647 million in the week ended April 25.

The so-called continuing claims data is reported with a one-week lag and will be closely watched in the coming months to get a better sense of the depth of the labor market downturn.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Paul Simao)

Responses

  1. Come out of your basements and GET BACK TO WORK, America before the Socialists completely destroy the World economy. END THE PANIC over nothing.

  2. And this is regarding just the FIRST wave before we have a vaccine. We are still feeling the economic effects from the 2008 housing crisis (thanks to the participation of Mnuchin).

    Do you SERIOUSLY think thst this economy will ramp back up to full spead while the number of new cases are still INCREASING? If you do, you are some confused bozos.

    Take two towns, one in Tennessee that is re-opening and one in Sweden that stayed open (more or less). People are responding in the same way – they stay home to protect themselves and their families. If they are forced to go back to work, they quit.

    No, we are in serious trouble and King Donald The Loser is clearly the cause. We will be feeling the repercussions of this crisis and the stupidity of this administration for the rest of our own lives.

    We MUST elect better politicians.

    1. Better than Trump? Better than Duncan Hunter? Better than Chris Collins? In a country with a SANE electorate, that would be a very low bar. In 2020, I am still not confident that the country CAN achieve “better politicians.”

      1. We must change or we deserve MORE Dear Leaders, Hunters, Cruses, Collinses, Pelosis, Schumers, Moscow Mitches, Neals, etc.

        1. I live and vote in the 14th district of PA. The only members of Congress I CAN VOTE for would be Rep Guy Reschenthaler, Sen Casey and Sen. Toomy. Only Reschenthaler is up for re-election in 2020. In 2018, he won 59% of the vote. He is an idiot, but it could have been worse–the other Republican in the primary was both an idiot AND crazy. Win the R primary and you win the general election.
          I don’t welcome the input of people outside the district and state as to who I should vote for, so I do not tell anyone else how to vote in THEIR state and district representatives.

          1. About half of us are so enthusiastic about our politicians that we stay home and don’t vote at all. That is on us.

            The trend is for the younger generations to be more progressive, so as long as politicians can engage them enough to vote, things will get better over the next few elections ad the population ages, but we STILL need to get them to vote.

            There is also a movement to get more progressives to run for more public offices. This will slowly build a broader pool of good politicians who will have the public branding necessary for when they run for higher offices. The Bill Clinton regime culled the progressive base and Obama decimated it even further. It will take time to rebuild, but that process has finally started. The nation can’t wait that long, so maybe this pandemic will alter the November results enough to accelerate the necessary changes.

            It still is up to us to elect better politicians. Being hesitant won’t cut it for millions of us. We desperately need help.

          2. Scott, you equate “better” and “more progressive.” SW PA is NEVER going to send an AOC or Rashid Tlaib to Congress. Guy Reshenthaler had a female, medical doctor of Indian ancestry as a general election candidate. R’s painted her as a Muslim that wanted to bring Sharia law. Connor Lamb, in the next door district, had ads with AOC run against him and she wasn’t even in Congress yet!

            WHERE are these districts you see sending Democratic Socialist to Congress in the near future?

    2. We certainly do NOT need any of the Jackass critters running to ruin the Nation. Look at the mess Barry Hussein Odumbo and his demented sidekick -“Sniffer” – left behind. Enough of the Marxism and Socialism failures.

      Trump-Pence in 2020. ANY GOP candidate in 2024 and beyond. Abolish the D’RAT/Socialist/-Communist/Stalinist Party.

      1. In January, 2017 Trump was handed an economy with the unemployment rate of 4.7% . Obama was handed an economy with a 10% unemployment rate. TODAY the unemployment rate is 14.7% for April, 2020. IMPRESSED?

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